11089: Fighting for a Seat at the Table: How Financial Activism Shapes Board Gender Diversity (session 25727)

Financially motivated activist shareholders regularly “refresh” corporate boards by removing existing directors and appointing new ones, but it remains unclear how activists’ influence on board composition affects board gender diversity. We shed light on this by examining changes in board gender diversity following activist demands for board representation. Using data on 876 board related activism campaigns between 2011 and 2022, we find that representation of women on boards falls after these campaigns and the decrease persists for four years. Unpacking the mechanisms behind this decrease, we find that these campaigns decrease board gender diversity by first expanding boards through the appointment of men and subsequently shrinking boards by eliminating director positions held by women. We explore several activist and director characteristics that influence this relationship.

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